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ABInBev's John Rogers Brings "SmartBarley" to McIntire Finance Students

Case facilitation highlights challenges, rewards of sustainability-focused, shared-value strategy
May 2016
John Rogers

In an engaging hour-long presentation that combined can-do enthusiasm with agricultural expertise, financial acumen, and innovative strategic thinking, Anheuser-Busch InBev Global Director of Agricultural Development John Rogers gave McIntire students a captivating look into super-brewer ABInBev’s complex, risk-ridden global supply chain—and the company’s bold new risk-mitigating, value-creating “SmartBarley” strategy.

The Feb. 29, 2016, presentation, which complemented a comprehensive SmartBarley case study, was delivered in McIntire’s Robertson Hall to fourth-year students in McIntire Professor Mark White’s “Business of Saving Nature” class.

“John’s SmartBarley case facilitation offered students an outstanding lesson in the enormous positive potential of corporate sustainability efforts,” says White. “He did an absolutely fantastic job of demonstrating to students how sustainability-focused ‘shared-value’ strategies can be beneficial to multiple stakeholders—including, of course, ABInBev.”

Beer Beginnings
Rogers began by walking the students through the painstaking, artful process by which ABInBev’s network of 17,000 farmers around the world produce the key ingredient in beer: top-quality malting barley. Noting malting barley’s dependence on just the right soil and climate conditions, as well as the exacting use of fertilizer, Rogers simultaneously enumerated the enormous risks—from political and regulatory instability to increasingly volatile climate conditions—faced by barley farmers throughout the growing process. Such risks, he told the class, because of their associated financial consequences for farmers, have in recent years served not only to discourage farmers from growing malting barley, but also have emerged as a significant threat to the production of ABInBev’s most essential raw material.

Rethinking Value
Indeed, Rogers said, it was the growing existential threat to ABInBev’s supply chain that led to the search for a profoundly different approach to sourcing barley. “We looked at what was going on, and we asked ourselves, ‘What if we think about barley production not as part of our supply chain, but as part of our value chain?’” Rogers told the students. “What if we worked with farmers to help mitigate the risks involved in growing malting barley, and engaged them as partners in enjoying the rewards of successful production?”

Such a strategy, Rogers and his team postulated, could have widespread benefits, not only helping to ensure the stability of the company’s barley supply, but also improving the lives and livelihoods of farmers from Mexico to China, as well as helping to introduce socially desirable, environmentally sustainable farming practices. “We saw in our supply-chain dilemma an amazing opportunity for a new shared-value strategy,” Rogers told the students.

Very SmartBarley
As a first step, the company set about establishing a set of benchmarks that would help to identify, communicate, and disseminate best practices in barley production. Then, designing a cutting-edge online interactive platform designed for farmers to use in partnership with ABInBev’s team of ace agronomists, the company went to work collecting data associated with the key barley production decisions of a small, pilot group of farmers. The data were then analyzed, as the company sought correlations between crop quality and yield with climate, soil, and topography—correlations that could be used to create a flexible, scalable set of “smart” global barley-growing standards and practices.

Rogers said the shared-value approach is part of a larger strategy for global good. “Our aim is not only to identify best practices for stabilizing malting barley production, ensuring stability and efficiency within our supply chain, but also to help create a better world by improving resilience and productivity within the broader agricultural landscape,” he told the audience.

One Giant Step
The new strategy remains a work in progress, with key financial details and results as yet emergent. Still, SmartBarley represents a tremendous stride in the creation of globally scaled, sustainability focused “shared-value” business strategies. “I’m absolutely fascinated by issues of global food security,” Rogers told the students. “Working on SmartBarley with ABInBev has been incredibly satisfying, in terms of leveraging the tremendous power for good within agribusiness.”

Looking Ahead
For fourth-year student Drew Souders (McIntire ’16), Rogers’ presentation was a revelation.

Before he heard Rogers’ presentation, Souders says, he thought a career in social entrepreneurship necessarily entailed moving to a developing market and searching for business solutions to social problems. “John’s lecture helped me realize that there is equally important work to be done in mobilizing resources here in the developed world,” Souders says. “It’s up to our generation to incentivize a shift of private sector resources toward problems that really matter. Pioneering companies like ABInBev are important first movers in demonstrating the profitability of socially conscious ventures, and will pave the way for other businesses to follow suit.”

Anheuser-Busch InBev, the world’s leading global brewer and one of the world’s top five consumer products companies, joined the outstanding team of corporate partners sponsoring the Integrated Core Experience (ICE), McIntire’s innovative, real-world third-year core curriculum, in fall 2015.